Where Will Tesla Stock Be in 5 Years?
Tesla (TSLA -0.77%) released its second-quarter update on July 22. The company’s deliveries increased by a healthy 25% year over year to 480,126, the best year-over-year growth it had registered in nearly two years. Tesla’s revenue came in at $28.2 billion, 26% higher than the year-ago period.
However, Tesla’s earnings per share dropped 3% year over year to $0.32, as the company’s decision to invest in several ongoing projects, including humanoid robots and robotaxis, compressed profits and margins. Tesla is no longer just an electric vehicle (EV) maker. Could the company make enough headway in other markets over the next five years to significantly improve the business?
Image source: The Motley Fool.
The bull thesis
Tesla first launched its robotaxi service in Austin in 2025. The company has ramped things up since. Tesla’s robotaxis are now available in several cities across Texas and Florida. Over the next five years, the company could build a large fleet in most major U.S. cities and start generating meaningful revenue from ride fees. An expanding ecosystem of driverless cars on the road will also help it improve its self-driving software, thanks to the real-world data these vehicles will collect, which will help it train its software.
Tesla’s robotaxi business may boost the company’s profits and margins. The company could also develop much more capable versions of its Optimus humanoid robots. If these robots can achieve a level where they can perform many tasks just as well — if not better — than humans, they could experience strong demand and potentially transform the labor market. Tesla would reap significant financial benefits from that. In the meantime, the EV maker could remain the top player in the market where it made its name.
Today’s Change
(-0.77%) $-2.38
Current Price
$306.84
Key Data Points
Market Cap
Day’s Range
$300.74 – $311.16
52wk Range
$297.82 – $498.83
Volume
1.6M
Avg Vol
48.1M
Gross Margin
18.85%
Read the fine print
Tesla could run into several obstacles. Let’s consider three. First, the company’s rollout of its robotaxi service may not be as fast as it expects. In fact, based on the projections Elon Musk had previously made, the company is far behind where it should be at this point. It could also encounter regulatory delays and competition, especially from Waymo, whose existing fleet of fully autonomous robotaxis is bigger than Tesla’s.
Second, Tesla’s humanoid robot project may also encounter obstacles. It could fail to impress investors, as it has in the past, and never reach the kind of versatility Tesla needs to support the demand that would make this project profitable. Lastly, with increased competition in the EV industry — and new models flooding the market worldwide — even Tesla’s core business may not perform well over the next five years. The bottom line is that Tesla is a risky stock. It could certainly soar through 2031, provided the company can get close to achieving its goals, but Tesla may also be a wealth destroyer over this period. Investors should only buy the company’s shares if they are comfortable with the volatility.
